Life Insurance – Pros and Cons of Term Life and Whole Life Policies

“Do I need life insurance?” “Is whole life insurance a good investment?” “Is term life insurance risky?” Questions like these are posted in online communities on a daily basis. The answers vary widely, with the term life and whole life camps polarized. The tone of the debate is surprisingly strident. After all, the topic is insurance–not a something expected to inspire strong opinions, let alone strong language. But words like “rip-off,” “scam,” and “waste of money” fly back and forth, sometimes accompanied by rows of exclamation marks or worse. What is behind the brouhaha? And which camp -if either – is right?

The two sides do not even agree about whether a person needs life insurance. Whole lifers say, yes. You do not want the death of a family member to disrupt your family’s finances or jeopardize its future. It is hard enough to adjust to the loss of a loved one. Adding financial difficulties exacerbates the problem. With the skyrocketing costs of funerals, even children and seniors should have at least a small life insurance policy.

Not so fast, say the term lifers. The only reason to have life insurance is to replace the lost income of a family member who dies, and then only when the spouse or family is dependent on that income. If you are single with no dependents and no debts that might be transferred to your family in the event you die, then you do not need life insurance. If you are married and your spouse works, you probably do not need life insurance, either, assuming your spouse makes enough to support himself or herself.

The time for life insurance, term lifers say, is when the policyholder’s income is vital to the financial security of the family. If, for example, you have purchased a home together and your spouse could not pay the mortgage and other bills by himself or herself, then life insurance is in order. If you have children, you will want to have enough life insurance to allow your family to maintain its lifestyle after you are gone. This includes not only meeting day-to-day expenses, but also being able to follow through with plans for higher education. Insurance professionals recommend buying a policy with a face value 5-10 times the breadwinner’s annual salary to help family meet expenses for a period of years.

Whole lifers see problems with the term-life scenario. The view it as overly optimistic, even naive. Many things can happen during the 20- to 30-year period covered by term life insurance policy that could extend the need for coverage beyond the policy’s end date. For example, children may be born mentally retarded, with severe autism, or with another serious condition that could prevent them from becoming independent when they reach adulthood. Children also can develop a disease or suffer an accident that disables them. A spouse, too, can become disabled. In these situations, the family will remain dependent on the breadwinner’s income long after the term life policy expires.

Term life insurance advocates point out that in such cases, the breadwinner can renew the term life insurance policy, or take out a new one. Now it’s the whole lifers’ turn to say, “Not so fast.” By the time the second term life insurance policy is needed, the breadwinner will likely be in his or her fifties or even sixties. Due to the age of the insured, the cost of a second term life insurance policy will be much higher than the cost of the first was.
With the added years come added risks of certain diseases. If the breadwinner is obese, has developed high blood pressure, a heart condition, diabetes, or another disease, the cost of the term life insurance policy will skyrocket. If the individual has developed cancer or AIDS, he or she may not be insurable at all. In such situations, the cost savings realized on the first term life policy could be wiped out by the high cost of a second term life policy.

By contrast, the premiums of a whole life policy are set for life and do not go up with age or medical condition. A whole life policy cannot be canceled due to medical conditions, either. The policy remains in force until death, as long as the premiums are paid.

“Until death” is another advantage of whole life, its advocates maintain. Whole life gets its name from the fact that it insures the policyholder life until death. As a result, whole life insurance is guaranteed to pay a death benefit-the amount the policy pays upon the death of the insured. The death benefit can be increased-at certain points at no additional cost-as the policyholder ages. A small policy designed to cover the funeral costs of a child can be increased to provide adequate coverage during an adult’s peak earning years. Whatever the death benefit or “face value” of the whole life policy, the insurance company guarantees to pay it. As a result, the policyholder or his or her beneficiaries always receive some, all, or more than the premiums paid into the policy.

This is not the case with a term life insurance policy, whole lifers point out. The term life insurance policyholder can pay premiums for 30 years, but if he or she outlives the policy-even by a day-then all of the premium money is gone. The only thing the policyholder will have received is 30 years worth of peace of mind.

Whole life insurance, by contrast, accumulates a value that the policyholder can access during his or her lifetime. This value is known as the cash value or the surrender value. The whole life policy holder can use the cash value as collateral for a loan, or even borrow some of it during his or her lifetime. The policyholder must pay this amount back. If he or she dies before it is paid back, then the unpaid amount is deducted from the death benefit. If the policyholder decides to cancel the policy, the insurance company will pay him or her the cash value, which is then known as the surrender value. Whole life, its proponents maintain, is not only insurance against death. It is an investment for life.

This is where the debate turns nasty. Term lifers often ridicule the investment features of whole life. Because whole life always pays a death benefit, it costs 5-10 times more than term life does. Term lifers argue that a person is much better off getting a term policy for the same face value that they would get a whole life policy, then saving and investing the difference in premiums. Almost any investment will return more than a whole life policy will, term lifer proponents maintain. Over 20 or 30 years, the difference can be vast. Buy insurance to insure, the term lifers say, and use the savings to invest.

Whole lifers respond that the return on a whole life policy is guaranteed at the outset, something than cannot be said for other investments. To earn greater rewards, the term life policyholder must take greater risks in the open market. Many investments will outperform whole life insurance, but not all will. Some investments lose money, as shareholders in World Com, Enron, Peregrine Systems, and many other companies can attest.

Even if the investment will pay out, it is not certain that the term life policyholder will actually make it. To do so, he or she must calculate the amount saved over whole life insurance; save that money every month, quarter, or year; research possible investments; and contribute to that investment regularly for 20 or 30 years. This makes sense for disciplined and savvy investors, but many others will find the endeavor daunting and time consuming. They may not start it, and if they do, they may not continue it. Whole life takes care of insurance, savings, and investment in one easy payment. Even if the returns on whole life are not great, saving something is better than saving nothing, and nothing is exactly how much many term life policyholders will end up saving.

Both whole life and term life have pros and cons. People who are financially savvy and disciplined will gain from the term life scenario. Those who need a convenient and simple mechanism for insurance and savings will benefit from whole life insurance. Deciding which is best for you requires an honest appraisal of your goals, your lifestyle, and your investing skills.

Fighting the Economic Battle Our Own Way – Get an Inexpensive Insurance – Auto Insurance

The global economic crunch has taken its toll on many people. But I do believe it can only be successful for those people who do not know how to fight back. At the end of the day, we are the ones that decide what our destiny will be and not some global economic issue going around. How do people deal with this situation? The rich and famous can call their Financial Advisers. But what about us the middle class the lower classes? We have no funds to put a Financial Adviser on our payroll. We can’t even manage our own payroll. We don’t have to work like horses to do this, but we can work smart. The very basic thing that financial gurus tell us is to scratch out all the things that you can do without. Create a list of the things that you pay for every month. Power bill, home mortgage, gas bill, telephone bill, education, insurance, cell phone bills, credit card bills, etc. Scratch of the things you can live without. Now take it further, with what remains on your list of can’t do without, and lower down the cost of those items? For example, your auto insurance. Of course, you need your auto insurance it is something you can’t do without because at the end of the day auto expenses blow up higher without insurance.

First, determine how much do you pay for your insurance premium. Second, this is the part where we can be smarter, find a way to make that insurance premium even lower. The key is great planning, analysis and with the use of good strategies. Our main goal is to make Auto Insurance on your wonderful list, and make it an Inexpensive Auto Insurance. There is a huge difference between those two things. The first thing you have in your mind and set your mind to it, how do I get inexpensive auto insurance?

Plan your steps. First do your homework, research and research. The internet is so accessible to many people today that there are good Samaritans out there who may have found the formula and can share that formula to millions of people like you. It is time to get those fingers on the Google page and type, type away. Next, is to review your current Auto insurance policy, determine which ones are no longer applicable. If your car is more than seven years old, maybe it’s time to look at how much you are paying on your deductibles or your collision coverage if you still need that. Write down all the changes you need on your policy and call your agent and tell them exactly what you need on your policy renewal. If they don’t agree, plan to fire them and find an inexpensive auto insurance quote. There are so many insurance companies out there who can provide you with not only just an inexpensive auto insurance but tailor fit for your needs, too. Inexpensive auto insurance is not a dream anymore it is a reality that more people are enjoying.

Affordable Whole Life Insurance – How to Insure Yourself Affordably

The following advice will guide you in the search for affordable whole life insurance. Insurance remains important to have no matter how tough economic times are, in fact the harder the times the more critical being insured properly becomes. However, finding just the policy needed and at a rate your budget can withstand can be far more challenging.

Here’s how to make an educated insurance purchase decision.

Characteristics of Affordable Whole Life Insurance

Whole life insurance has a number of variations and the variations can impact the cash value or death benefits as well as how the premiums are paid. The price tag will depend on how much of a benefit is sought and the type of whole life insurance contracted for.

There are at least six major types of policies available. Some have a participating clause where the insurance company shares excess profits with the policy holder, others have non-participating clauses where the premiums vary from year to year but never exceed the initial agreed upon amount.

Other policies permit the payment of the entire amount in a single premium payment and others called “Limited Pay” have the policy payment set at a limited number of years. Thereafter the policy is still in effect and the death benefits will be paid, but no further premiums are due.

The term affordable whole life insurance of course depends on the needs of the insured individual as well as what is offered by the insuring company. In general it is advisable to read the fine print and be aware of any limitations in payment (such as some companies reduce payment in the first year or two of the policy) as well as any rate changes (often in your favor) that can occur as with Participating Whole Life Insurance.

How Much Will It Cost?

The cost of affordable whole life insurance will depend on the type you select. The Limited Payment variety will require higher payments for a shorter time. Participating or Economic policy premiums may vary in payment amounts with the profit of the insurance company and the economic situation in general but in general will continue throughout the insured person’s entire life.

Reputable Major Providers

Finding an affordable insurance product can be complicated or relatively simple, depending on the method chosen. Research is important to understand the various types of whole life insurance being offered by companies and if they are affordable or not. Doing your own research on every major company will likely be more accurate, but it can take weeks.

Using an online tool such as ePolicyLife can ease some of the research involved in determining premiums. Many insurance websites offer an online tool that will give an instant quote with only a few clicks of the mouse and supplying some very basic information.

An Online Continuing Education Insurance Course – Will It Be Right For You?

With today’s numerous demands of our time, attempting to keep up with the insurance continuing education prerequisites sometimes feels out of the question. Yet, complying with the licensing regulations to your state and staying current with today’s laws and processes is needed in the insurance industry. So what can be an easy solution to do this? Without doubt web based classes come to mind as they can be achieved anywhere whenever you want, as long as you have access to the internet. But what features is best to find in selecting an online course? Listed here are suggestions for you to think about.

1) The online continuing education insurance site should present each of the courses and materials you must have for all of the 50 states. This is very important therefore you aren’t required to go to different sites, depending upon the course, which makes this inconvenient for you personally. A good provider knows the prerequisites for any state and will present you with these details as well.

2) Different people have different styles of acquiring knowledge, not to mention different lifestyles. A reliable provider should accommodate you, not the other way round. They must provide you with supplies in different formats including visual, audio download, and even, printed form. Currently, material downloadable to an iPod, Music player or CD certainly are a must.

3) Classes must be created so that people in the course can choose if they choose to complete it fairly quickly or over several weeks or a few months. Being able to login to a system, as many times as they want, and proceed right where they left off is definitely a necessity. This feature reduces frustration and a lot of wasted time.

4) The materials should really be comprehensive, easy to understand, and all-inclusive so they can allow people in the course to pass the test, as in the end that is the objective of any continuing education course. On the other hand, when enrollees do not successfully pass the exam, for whatever reason, they must be permitted to retake it as frequently as they really need to so that they can successfully pass the course.

5) After deciding to buy an internet based course, the course provider should certainly offer prompt test outcomes and handle almost any interaction and licensing requirements with the state certification board directly (some states do not allow this). The student must not have to take care of these typically irritating requirements, and a lot of paperwork, whatsoever. Additionally, the paperwork must be executed automatically in just a couple of days at no extra cost.

6) Lastly, though extremely vital, an individual taking a continuing education insurance online course should promptly receive their proof for completing any exam. The provider will need to produce them with certificates of Completion which should be down loadable and printable instantly. If your student needs future access, in the event that evidence is essential or they forgot to print the proof, it must be obtainable then also.

This is simply not a comprehensive list, but it should provide you with some initial tips to provide help to pick an internet-based continuing education insurance provider to satisfy your annual requirements in a very flexible, user friendly manner.